Most new diagnostic technologies have not been adequately assessed to determine whether their application improves health. Comprehensive evaluation of diagnostic technologies includes establishing technologic capability and determining the range of possible uses, diagnostic accuracy, impact on the health care provider, therapeutic impact and impact on patient outcome. Guidelines to determine whether each of these criteria have been met adequately are presented. Diagnostic technologies should be disseminated only if they are less expensive, produce fewer untoward effects and are at least as accurate as existing methods, if they eliminate the need for other investigations without loss of accuracy, or if they lead to institution of effective therapy. Establishing patient benefit often requires a randomized controlled trial in which patients receive the new test or an alternative diagnostic strategy. Other study designs are logistically less difficult but may not provide accurate assessment of benefit. Rigorous assessment of diagnostic technologies is needed for efficient use of health care resources.